GGRAsia – Macau posts 23-pct decline in number of licensed junkets

Macau posts 23-pct decline in number of licensed junkets

Jan 27, 2016 Newsdesk Latest News, Macau, Top of the deck

The number of licensed gaming promoters in Macau – also known as junkets – shrank by 23 percent over the past 12 months.

The total fell from 183 in January 2015 to 141, according to a list of licensed operators published on Wednesday by the city’s gaming regulator, the Gaming Inspection and Coordination Bureau. The figure includes both companies and individuals licensed as junkets.

The gaming regulator did not provide on Wednesday an explanation for the decrease in licensed junkets. Earlier this month, the new director of the gaming bureau, Paulo Martins Chan, had mentioned that the regulator had not renewed the licences of 35 gaming promoters, due he said, to their failure to submit information required under new accounting rules for the sector.

As of July 2015, there were 182 licensed junkets in Macau according to data provided by the gaming regulator to GGRAsia in August.

Over the past two years, Macau recorded a net reduction of close to 80 in the number or licensed junkets, show official data.

In October Macau’s gaming regulator announced stricter accounting rules for junket operators, starting this month. According to the new guidelines, all junket operators are to compile and submit monthly accounting reports to the gaming regulator.

The announcement of these new rules followed an alleged fraud case amounting to tens of millions of U.S. dollars that rocked the Macau VIP gambling segment in September last year. At the time, Macau junket operator Dore Entertainment Co Ltd, which operates VIP facilities at casino Wynn Macau, announced it had been a victim of internal fraud by a former employee.

Macau’s gaming industry is now facing a further alleged fraud case in the VIP room segment, involving funds totalling HKD99.7 million (US$12.8 million). According to media reports, the money had been embezzled by a senior staff member from L’Arc casino.

Investment analysts covering the gaming sector say that the revision of junket regulation in Macau is likely to intensify industry consolidation among the junket operators. Several add that while it could weigh on the industry, it might also help restore the confidence within the sector.

Another factor putting pressure on junkets is the ongoing slowdown in high roller play. Gross gaming revenue in VIP baccarat – a segment heavily reliant in Macau on junket operators – fell by 40 percent in 2015 across the whole Macau market, to approximately MOP127.8 billion (US$15.9 billion), according to official Macau government data published earlier this month.

The softening casino business environment in Macau – described by investment analysts as partly due to China’s ongoing anti-corruption campaign – has led several junket operators to cut back their operations in the city. Many junkets shut down VIP rooms during 2015. Some have started to explore opportunities in other regional markets, including the Philippines, Cambodia, Vietnam and even Australia.